WSC - Earnings call 4 2023 | WillScot Holdings Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Fourth Quarter 2023 WillScot Mobile Mini Earnings Conference Call. My name is Amy, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded.

I will now turn the call over to Nick Girardi, Senior Director of Treasury and Investor Relations. Nick, you may begin.

Nick Girardi

evening, XXXX to Earnings good Mini WillScot and Quarter Fourth Call. afternoon and the welcome Mobile Good Participants on Officer. today's Officer; and call include Brad Boswell, and Soultz, President Chief Financial Tim Chief Executive

the Today's may WillScot Mini safe Slides presentation website. our section and contain statement. be on Mobile X material X harbor of Investor found the Relations

We will during statements and presentation be the making forward-looking session. our Q&A

many to of operations and of variety business a are control. subject are which and Our beyond our uncertainties, risks

differ materially a today's our result, results may As from actual comments.

For possible the SEC. actual the and a harbor factors that results to presentation complete description with more of refer safe could differ risks, the our filings cause and to in other statements our please

I'll the With to that, Brad turn over call Soultz.

Bradley Soultz

for CEO XXXX company. Brad returns, today. Thanks, strength was Nick. abundantly market deliver joining for clear. record platform Good us that to conditions, of platform and Slide predictable X. Mobile consistent, afternoon, Soultz, Mini. Starting was on a built a our year compounding you I'm We everyone, of of WillScot thank irrespective the and

We flow invested and eclipsing grew which of $X.XX. $X than earnings cash share EBITDA faster ops cash return share, delivered $X expected. XX%, of is financially, are We of adjusted we flow, $XXX continuing from by free billion capital million ahead of on per expectations free to per we XX%

compounding sets with our along sight growth, records. clear returns, value continued for us up All These of years company metrics these of to of are creation. line long-term

harmonized system, provides platform we offering team the acquired scale benefit to can we and IT of continued for CRM upon our XXXX, customers, which and shareholders. upgraded easily invest and long-term world-class businesses. which our in portfolio our integrate a We In our

foot our to we're continued structures. square and We positions continue over history comprehensive expand and climate-controlled reinvent And as pure-play now in of market provider, years temporary excited storage this only space leadership the XXX solutions. We offer clearspan come. million expanding of customers space for VAPS offering our establishing innovation, to and to our

unchanged. and customer by driving and and tailwinds VAPS the and is margins service technology strategy in to our from experience. XXXX, see consistently We begin team best-in-class grow leasing immediate and We our into by improve significant frugally we safely continuing volumes investments XXXX. rate VAPS underpinned and rate As revenues

We also see to expand addition solutions differentiate definitive space tuck-in our agreement invest in to capabilities our of continued to to previously announced opportunities And McGrath. through offering our to acquire will portfolio M&A, continue in solutions. we programmatic

Just a highlights. few

investments to tools. in about capital dispatch I'm digital service upgrading our digital while and and sophisticated with customer enhanced generation excited more introducing First, human tools. portal we're both and presence demand with field new state-of-the-art tools customer Web particularly plans making improve our our experience

the scale especially investing in Second, and existing continue our in innovation, to we'll continue offering. products, value-added

system we XXXX. proprietary across Our PRORACK rolling is enter out XX markets as

all of QX, give build by proprietary revenues our you some market for which on our seen prototype have in comprehensive expect in to more and lease are And now storage our a containers we with opportunities World system introducing place in us to customers may of we're at Concrete of which solution the the beginning customers. ramp And Convention, XXXX. to testing our solar providing

solutions single sales is our all and our structure our approach, unified into prospects. of customer of improve branches WillScot maximizing for market penetration that further Mini allows and to build-outs our leadership a businesses our present in to opportunities recently field these all structure the all teams local to Mobile solutions our customers consolidating given go-to-market of we've real market, suite technicians of of as responsible while third, to Each our market, exciting accountable support leverage accelerate new in and well team. us and drivers, our have legacy And and of growth allows whole that's space each such to platforms development growth that of team In our for and estate underway. geographical to and providing order initiatives all resources gives us storage clearspan This growth operational customers the us time solutions. structures full climate-controlled are increased career a multiyear single our service,

Now turning to Page XX.

the the was are we acquisition. potential XXXX, year. a us last same at it's And ask prior both like integrating reality above Tim operated economy now on XXXX, on the reflect our then, the concerned orders last while we've which impact busy foot macro on me nonresidential market portfolio. the later. began were business. cyclicality this a wasn't sometimes discuss in years. important last we time and modular outlook, occurring. duck XXXX in and the there complete a even and in growth months dollar has that event our discussed to And the on through Investors per square X we about if major significantly quoting of basis converting into and the levels water the conditions period our over ModSpace I'm net will starts activations given over is the slowed growth confidence highly X The volatile As QX in And

starts pro billion time, indexed lease that on we've At a forma square nonresidential revenue, revenue generating XX of months were lease and prior of the foot we QX over XXXX. approximately In this basis. to our GDP graphic, $X

control, outside along leasing revenue service strategy that to all duration. revenue idiosyncratic of the X-year the growth the and macro and of next at with while billion, levers our years, our volatility. X improving $X.X to of That's and shows zero $X because bps grew ROIC is leasing the X,XXX disposal, movements and billion Over Despite recurring, average value growing our XX% are of predictable lease XX%.

Page Now XX. to turning

about RentCorp existing further platform. We're the our announced accelerated value undisputed proposition growth to McGrath complementary our allocation. leadership drives to new our the within category extend to definitive strategy positioning recently and extraordinary opportunity and excited Our how differentiated execution accelerate world-class customers, all will agreement demonstrated already capital growth, and with acquire

were size $XXX LTM of As to up closing, over Mobile delivered then, our this transaction we look EBITDA. performance EBITDA, divested XXXX. back and merger. of WillScot reminder million let's acquired, just of how doing to a we've billion since further Since our than At around of we EBITDA can the growth, accelerate more and Mini the following transaction the we've approximately XX% $X a time

XXXX, XX% our return and believe on can invested we and our XXXX margin and increased XXXX a operating on adjusted our between EBITDA XX% metrics. to capital between XX%. Notably, performance Given key of we in near-term few XX% we ranges achieve

are over achievable also million McGrath cash We of believe this These flow itself free year we $XXX which can X. acquisition, would horizon. announced in accretive the X-year irrespective of to be earnings achieve within cash milestones

value investor is simple. Our proposition

our enter of maximize creates cash, shareholders. more is business a due for our increases growing billion new growth drive lot leadership, our to value a all most we clear performance markets and from invest for idiosyncratic financial Our levers, our our strength we which X-year and predictable with position And We by customers market of $X governed of market. and value returns durations. to can in lease sustainable importantly, total which and generate addressable

hand With that, I'll over it to Tim.

Timothy Boswell

everyone. Brad, Thank you, afternoon, good and

despite strongest into in year summary year market shows a are our the high-level And headwinds, the XXXX carrying financial which supports of quarter. was XX some history. another of record XXXX, company's Page we momentum performance.

nonresidential our contraction the which discussed commercial of retail segment. Nonetheless, with volume in in leasing offsetting KPIs X% were mixed declines, in with segment. the were in line modular storage growth year, Our footage square revenues throughout construction we've by with stronger year-over-year being plus grew the rates generally starts QX, obviously headwinds

bright to EBITDA XX% the record a be spot quarter. adjusted with into Margins XXXX heading margin in continue a

which range. to XX% We continue for operating operating the target with capital XXXX. costs we flowing with strong leasing cash and our on a business expect margins continue in our free And middle the both flow of stronger lower year leverage into the nicely expenditures in the is cash expenses to see XXXX, and margin SG&A

and net X.X% the our count we reducing platforms, debt climate-controlled the storage Strong pictured throughout X.X you XX% the of our XX which EBITDA And see including XX.X structures cash We in returns XX%. target million Return invested by on areas. $XXX our acquisitions leverage million shares in us of X capital operating near-term capital of over to confidence X.Xx within share repurchased range deploy adjusted year, invested XXXX, $XXX And deck. and clearspan inside can is our to through our of last course X.Xx. million of climb give during flows months. continues to to other the to for range comfortably XX%

an But cash of underperformed and guidance efficiency a business in year, the and the year financially profitability reflects focus So growth, an during been plans our overall, from extraordinary EBITDA, trajectory the consistently and capital headwind run area supports has was resilience of for year free another Volumes a are in those and flow stronger our our strong you regardless, our which excellent which of see team. and it business rate margin the never standpoint. model. our so

and revenue adjusted the out lays XX for Page EBITDA quarter.

up worth Let's streams, with segments total noting. between in are were start X% revenues, nuances QX which revenue and with which some

due basis. helped in some again, And decline retail Leasing modular are XX% of XX% up down the that new segment a slower The opportunity up leasing X% in QX, I transportation contribution in expect season we a our XXXX. revenues consolidated where those storage drove segment. stronger sales XXXX. area consolidated were additional and the storage in contribution sales offset used and to all also the retail to much to in headwinds. storage the mentioned some have X% revenues X% on an growth our revenues in I in were in confined year-over-year

will year-over-year all-time XX%, from referenced. delivery basis we're expanded and of EBITDA tailwind driven and and be items QX pricing in QX as increased long-term previously. pick discussed products increased based across as efficiencies volumes likely points we installation, by overall Margins Brad by scale compress that into XXX maintenance and up activity to continue seeing high. well was margins exception margins sequentially compress the which operating revenue that line and to and modular QX as a with an QX and delivery on penetration the Margins all value-added

year to is, XXXX, reflect trajectory however, to and XX% attractive, our near-term for expansion annual we're operating quite to and we another expecting increased margin that. longer-term of Our overall XX% range

per XXXX, $X.XX up compounding up see of flow share operations expansion into earnings X% growth XXXX million growth and consistent both year exceptional versus from in continuing beyond. XX% with across Overall, the EBITDA this segments. for an earnings margin XXX% in per quarter, we by up with share was in cash QX And free and and it continuing the being growth drove to $XXX

Moving XX. to Page

We expect very continue cash on XXXX based to to net compound and see continue that cash healthy into our outlook. will activities from operating flows predictably flow

at levels approximately volumes of from benefit was biggest driver in and were which more also we Net will we XXXX, both work spending CapEx expenditure maintenance to Obviously, sustain XX% down moderating reduction, efficient expect although order as inflation, volumes the of continue the capital I year-over-year. return.

call, platform. the CapEx As our due from QX growth storage in QX climate-controlled increase net I to sequentially QX into investments noted primarily did on

cash to QX. quarter, and cash free margin million year-over-year the XX% to flow Overall, increased flow in increased $XXX approximately in XX% free

of and business cash be per scale. horizon a XX share, as XXXX, feature another we cash share set flow the operating before this we're into comfortable over flow pathways XXXX free our we and our forward $X.XX cash to milestone margin flow a continues of flow best-in-class see of McGrath. as on increased eclipsing cash XX% the growth per free free of Over profile, multiple target both margin $XXX the our free share so to million of quite for so $X model year We model, roll we incorporating our the generated we're in up flow XXXX, particularly middle and to range. Based records, cash free months, a free per of differentiating $XXX and company for last of with cash strong million outlook flow

to XX. maintained comfortably debt range. last adjusted Page net which EBITDA, sequentially is to from Turning leverage our QX XX target QX We inside months to at X.Xx

approximately per easily previously, deleverage choose. said year X I've As when turn so can by we we

again this comfortable leverage upwards target the flex level intend So back acquisition at to for range. then we're deleverage opportunistically McGrath our and into and

most this In to current and present cost at view for another transaction January term SOFR swap rate fixed of XXXX, to interest the X.X% here notional for average We cash debt. floating incorporated we million a $XXX SOFR. costs executed value of a fixed X-month of pretax weighted of our

approximately inclusive interest of December rate XX our average pretax weighted of was all swaps, and As X.X%.

fixed cash debt floating rate. Our XX% was interest approximately was million, our and XX% annualized structure and approximately $XXX

in to part of we We capital have which have us to approximately allocation revolver, $X.X as And billion ample priorities. our reminder, of as flexibility liquidity fund gives the from ABL commitments a $X.XX base and bank acquisition, McGrath ABL McGrath's our closing, our give group availability at to borrowing revolver include which our a upsize our billion in size facility will in that facility. to assets us excess continue

and McGrath. abundant combination and undertake that we're Overall, liquidity structure, the we obviously of taking with flexible strength have advantage to synergistic a capital highly

the in months. divestiture. inclusive allocation generated our shows $X.X XX We capital billion the framework our capital of Page a last the U.K. over basis XX of on and year, leverage-neutral performance

for outstanding invested maintenance over consistent total and net months. which approximates last invested in $XXX in invested We and addressable the X.X% of levels. was QX while resulting an market, CapEx repurchases, and million M&A in expanding our million XXXX in framework. allocation in $XXX reduction shares capital with economic net we XX in million share We solutions our XXXX, Our $XXX

the shareholder points earnings and over returns sustainable share capital flow Again, per XX%, annual And continuing on cash you time. and per and from invested by basis our respectively, growth XX% value share in XXX can XX%. free see we to return XXX% flow create operations up generating free our up up for year-over-year, year this cash

XX for outlook XXXX. turning shows it Brad, our to Page before back Lastly,

are navigating financial heading rate in intend compelling and build record some of fully we XXXX. we upon metrics the a XXXX that to we While headwinds, achieved all deliver run into

environment for last has cautious the Our QX square starts. given footage construction the contraction since XXXX the more view macro nonresidential become of in quarter

projects are compete. manufacturing within We larger-scale we markets industrial for uniquely and end positioned tailwinds well from are seeing continued which to our

markets warehousing. We also expect as such office smaller to headwinds commercial continued related and and projects end

However, we XXXX. cycle those rate do if of turns course stabilize interest see segments the a through the scenario where

mid-single-digit With half in volume for year. across year-over-year turned encouraging to delivery units Delivery February not storage which and rent exceeding the growth this on headwind the corner. modular backdrop, the our our positively base storage so off fleet QX, year-over-year, is growth is in second is of activity cause average case the inflect this delivery through expectation, rolling yet whereas still through retail have volumes would

the approach cautious volumes the a at this and risks taking respect across year, are we're in I and think So to point balanced with opportunities those solutions.

across all lines. Pricing remains product strong

tailwind case KPIs, to products completed increase, X% all incremental similarly, we're storage that the to assumptions combined continuing with continue that our product delivered year-to-date as our million and our year. are across value-added products segment range on on guidance. total delivered products value-added So base Value-added These from up a to both from a growth to absolute the and the million in start are year. for And basis. the value-added segment penetration year-over-year are deferred an $XXX our benefit in an of Year-to-date, benefit build in for in $XX continuing acquisitions modular support historical approximately consistently levels rates rates lines. with in grow were revenue encouraging XXXX, products highs, the revenue so midpoint line roughly leasing and

from contraction and we QX a as expect standpoint, the revenue sequential through From then revenue build steady into a see seasonal normal we to year. a timing QX progress

year half expect first revenue overall revenue higher the bit of growth in year half for with X% growth I'd in the to midpoint. a So total lower the at the be and second the

of assuming expecting would the EBITDA midpoint increase the margin the expect I'd sequentially ranges. then stronger margins stronger to be volumes result to as contract saw in for a approximately at at expect guidance strong of XXXX. year-over-year, the to XX% have net XX our another expand consistent of expansion year, point full with from margins, And year and margins delivery basis terms we're growth both in approximately EBITDA of we of we into and In up in year, EBITDA that than progress second the year-over-year quarter sequentially first a QX for half year to be ramp QX followed relative the through in in be growth should a year. contraction course midpoint the similar I'd seasonal through of EBITDA first. a the of revenues, guidance year. the The the the by the normal sequential we

at the from past years categories, our fleet which of million increases per up the the to with will rate flow $XXX resulting in would and interest nearly limited $XX And fleet run net CapEx, normalize the based $XXX in implies in another be on Capital XX% basis. solid of extremes demand a relative costs, compound product guidance approximately investment year purchases storage with share modular cash expenditures assumptions the or approximately cash category, newer of of year-over-year. X which increases midpoint, on refurbishments meaningfully million in million approximately should free growth,

our practice, as closed. contribution any acquisitions is we update will not transactions quarterly does As and such from assume the have new to the incorporate McGrath, that guidance guidance

a matter, housekeeping of another realignment our how beginning is reporting, transition reflection expect operate which in segment we we field to with a As better single to XXXX QX reportable January, the given business.

website. continue same will level will all with we comparability of to our operating for KPIs change, data historical our this and make detail we provide Assuming disclose of the on

this continuing are our auditors. to We approach finalize with

have the introducing going in to we XXXX since we I'm group, at transformation our execute as public, has McGrath. company our transformed for benefits structure, our technology unprecedented of our in years is product peer compounding deliver in plans and while X the year continue this that record extremely us rate past expect the Over a allow pace in XXXX that confidence to our team our by offering our recent results our run and accelerating delivered into will investments proud XXXX. XXXX while and of another organization

that, Brad, hand I'll With it to back you.

Bradley Soultz

their our in Thank safety our our the Tim. of remarks. to for today you delivering best health. This to company wish you Thanks, open and their good for for strong and in our you prepared concludes XXXX. another history look would Operator, line I financial and for to trust please customers continued safest capital. performance team continued Thank listening I with questions? you you shareholders their thank to our business. forward year the all ever,

Operator

comes Tim with Mulrooney first Blair. And [Operator Instructions] from our William question

Timothy Mulrooney

to wanted saw on growth. I portable understood increase of half the was slides I storage make cold I total about sure storage acquisitions. the that rate your driven recent by the

mean Just core that don't acquisitions? were XX% that average to storage rates year-over-year, clear, does about, excluding organic I be up know,

Timothy Boswell

mix QX, that It the is fact does a made of typically, that lower purposes QX storage significantly seasonal rate which at storage up for Tim, a average the of is conceal rental pricing. higher business, correct.

if of would retail storage a of we average So QX mix effect and just have rental core lower storage year-over-year been seasonal total, roughly the rate of about our comprised pricing, year-over-year. kind pricing in and retail mix strip the XX% out seasonal was that flat up

very by So rental full inflated addition and quarter core the bit a in then still storage the the in bit business for lower in a QX. of seasonal retail by performance mix platform a volume a strong storage of rate cold average diluted QX

Timothy Mulrooney

portable talk can what year? expectation all about Taking bit growth rate a helpful. account, storage That's that for it. you your this in into Got of little is

Timothy Boswell

Yes.

to think going cold we full the out into roll double digits. we're be through a that that QX business. that my probably the XX% go excluding Maybe rates rental we not high high we storage, but up enter storage taper with as storage for with to continue is the saw core just to I stripping storage year, XXXX expectation cold as in down QX, starts teens bit

Operator

of Our line Manav Barclays. next question comes with from the Patnaik

John Ronan Kennedy

This is Kennedy on Ronan for Manav.

covered year? As acquisitions what the store and were you pricing question, XQ units and for for those aspect full the were a announced, recap of off decline recap that storage, drivers for follow-up the which unit ex the to just Tim's of can both on

Timothy Boswell

or footage, use retail And and that average units about the down core prior this kind unit of is to XX,XXX tracked the units about that that through cases Yes. year, attributable down year. industrial on to the focus can on construction, And overall other with rent seasonal, were within the overall clientele some XX% to I'll commercial just year. of the some half Tim. the Ronan, to think of market course were related square segment. which of our And rent XQ on other is the remodels clientele, retail you components. as versus and for is, decline component of attributable nonresidential roughly

are the those overall, of volumes. storage So drivers the primary two

John Ronan Kennedy

of on to some I some on segments starts, you type continued demand as commercial just you what then then or into other insights office touch insight Got thing, that picture. you're or, industrial, leading of of cautious it. overall know from specifically guess, your demand -- gotten happened broadly said from, give project you've time, out? on Any the can the seeing demand end elongation and more I some standpoint quoting the volumes quote-to-close macro kind and by delays, such that typically warehousing. more to overall seen lead what call say, And you for headwinds a And if in headwinds indicators had kind us and given non-resi tailwinds manufacturing in your markets. or

Timothy Boswell

modular the ground-level starting net our our to the year-to-date digits growth Yes, in year-over-year QX as order it's the actually we're back as year-over-year the that remarks, as call. just offices. Brad excluding to growth mentioned now see far prepared in is And business level, single quoting modular interesting an that high mid- exceeds in in his one. And see we approaching to business, started to digits year double start what

some to QX year-to-date start we we converting So from that we year heading we modular into a activations are business into saw seasonal as our March to the as into in giving -- usually for to given seeing see that February, us build April. in optimism January reason environment go demand that's that activations it that and quote growth February. the through in in And we're relates

exceed signs year. are encouraging the growth volume our in far, around mid-single-digit centered pretty case so frankly, base assumption there So for and, which the the are modular business delivery

said demand And storage the seasonal the a from quite QX. basis, my retail if still seasonal pronounced I isn't XXXX. in contribution in remarks, we was As fairly on yet. runoff there year-over-year at business We're that look QX experiencing still

So have that of volumes QX. we there I into still But XXXX. which, purposes for again, running both headwind storage terms think a a volumes think I when the we're account I modular we've of in of we got a bit balanced in think ahead segments heading outlook our into take

Operator

Wells from comes with the question Fargo. Weber of next line Our Seth

Seth Weber

I inflect Or volumes you turn do positive without even margin I about question positively, margin is, the comps flip comps you positive? year-to-year. could guess, I being of my quarter quarter down think to year-over-year turning need to the margin in Tim, your do be year? for for first comments guess to rest positive the second volumes heard up

Timothy Boswell

Very can is inflect, growth our we maintenance much expenses. quicker the without margins latter, the growth. frankly, even in And incur the it activation business Seth. when activation Absolutely,

maintenance revenue lease run go and rent on As build those then units we're our performing rate. activities,

look the and expenses last year at it about. right terms in Brad activations incurring was of light on creates the That when So pretty we're comparison you to basis. the business talking year-over-year now And a in was maintenance maintenance support QX upfront a in your that short-term pressure, volumes. in actually more those especially the of the activation modular business

quarter because that that activity actually of for maintenance slow, reverse a margins stronger investment. kind So thing or is activity, as even and a bounce year. a positive implication with you're then faster. would you'll more through back you itself volumes The so getting If, of this the supporting activation progress short-term activation margin indicator that is to good get were compression, reason, compression but whatever you're

the of seasonal business a we're going seeing take to year-to-date, said, starts April. So it's it's And second February. of sign it's place build middle true March business. positive the in half that in the in early, That into typically the

to had But that the of into coiled Year-over-year coming A maintenance similar I more XXXX of time, described out lease we activations as the think if same as I exceeded at the kind incurred tighter of QX margins year. result. from spring. dynamic prior sequential year went pandemic. being we a of then progression phenomenon, exact was stabilize pops kind margin of significantly rebounding back XXXX in revenues you result, the where levels. business XXXX, of the our rest a first pretty half back the The a like the And as as through QX just

Seth Weber

anything any aware Yes. or that more addressing how selling to Super consolidated or any Is I to making are be helpful. sales consolidating sales we with -- think changes an cross-selling you're that. stuff And heard adjacencies? Or this should and comp respect discussion you then force of, around I like from there just structure perspective anything incentive force?

Bradley Soultz

offices very they We were a Brad. But more Seth, characterize up side; excited by recall, it the effectively and Mini WillScot last ground-level we're sales something revolutionary. evolutionary year. focused storage That's Yes, very you'll collaborative. complementary, about, X really side little would and as team it's and running I the operated separate on CRMs if until than early

So afforded you ability us this the to if combination will. of the CRMs shift, make the has

X P&L, other which market all has we is every add and clearspan important climate geographical products. covers control, as end products, So particularly

Think inside team about to ZIP whole band So storage accountable massive of had for the We it, of will. with territory. a a focus, have Think reps behind X past, a you territories every it aligned, more modular. probably now as X sales the as activity. smaller sales similar X bit codes. would person we've X got territory, if covering the more to That's support

year as tools investment in as well significant as digital to comments, platform And whole that. the acceleration accelerate creation this then I pretty in my a mentioned demand prepared further

cross-sell So a us we're super and all modular to it does the evolutionary. very products. more well add Again, excited. think accelerate But of went very, field. great in it new in put and these The as storage great change spot

Operator

next with line the question comes Andy of from Wittmann Baird. Our

Andrew J. Wittmann

I are thought would about the like you -- judging it guys -- I talking here, looks slides Great. Yes. it spot way like looks the you your segment. modular in reclassified from VAPS

Before modular now and modular, modular. in was just it modular, it's

was you spot light for just trending. that on VAPS just So Tim, comparison been this hoping how metric some purposes could to shed as has I

guess, If basis. you not give here ask is I basis, that of I thought see you spot to clarification basis a for just AMR, so But comment I X% I could the number that that. I old us AMR, that's will. the would the think total if on old on the kind the on VAPS, modular-modular down

Timothy Boswell

February, we of Through $XXX. would at delivered look as as north VAPS Yes. have rate you historically, you're the if reported,

as said kind how to back metric we're and my we to high if to were that remarks, look relative I levels, all-time used back of in to you So this. report prepared go at delivered

we As very I likely moving remarks, mentioned Andy, single in are a my to segment.

and to modular class, And more So of goes importantly, in single where modular combined got operate kind at we'll we're away. that's modular segment asset as and the the and look storage we'll in this market. a modular dynamic the going fleet, you've how fleet product product modular

attachment reporting the some course obviously, look penetration prior has we on time lens some the very if rates, very second the last you offices, systematically changes were year, of consistently. based we're through When you growing good the across been the made for methodology. class process quite and rapidly of half VAPS through the at that asset of seeing ground-level now, quoting include of it in the to And

Andrew J. Wittmann

Got it.

comments. just then plenty changing again a thought sensitivity, but talk little I earlier call could times even your I'd environment ability worth asking I given that's bit and Okay. still before if demand price? a asked think affected guess all your that. is your for follow-up, That's changed per rate a question what been ask raw demand I at the that the And dynamic helpful. I'd you on of Has about just

Timothy Boswell

in QX. it were believe cold our breaking No, XX% performance approximately container in of down and those excluding rates price one was I year-over-year questions the up core first storage, the category, hasn't.

good is we at modular in a contracted a of powerful around modular we hasn't indication that spreads be a then indicative XX%, momentum across spot of still our quite the products. XXXX. the spread favorable carrying approximately continues ground-level meaningfully. got I that's are look products, So if spread tailwind And our rate office that so XX%, that the to of And so into

good our approach. feeling changed rate going So about haven't the into and XXXX, we environment

Operator

question of next comes with Schneeberger line Our Oppenheimer. from Scott the

Scott Schneeberger

is what in the address what Tim, high kind however price, contribution from address the XXXX what the a end could it, your of then control else that want volume what end of the and or low climate of or is in you is bridge midpoint and you what is, or everything at XXXX clearspan guidance, kind to guidance? contribution

Timothy Boswell

about And EBITDA Xx EBITDA, through -- say, metric know $XX about flow here, purchase that at we to blended Okay. of going invested every of I of all numbers. in but $XXX bridge to has our There's I'm million for was if that about an about acquired I don't look about million million. multiple. our will we implies XXXX, yet $XX acquisitions that which acquired

the terms $XX likely growth of of then other of from would business. get mentioned XXXX, the $XX incremental lift infer midpoint. driving I mentioned value-added at rest at the so midpoint already can that to And if executed. get of the in of are to year pricing basis you the we've our guidance, coming a get and remaining, midpoint will us whole. And of it, to just the products XX I EBITDA to So on average somewhere look down that then acquisitions points to the coming rollover as the growth that you XXXX. from levers flat the expect the the in in the year, of the million half margin inflecting second we be be likely call million to organic of EBITDA for in expansion EBITDA volumes

Scott Schneeberger

be about of remodeling some comps. the plenty And and heard Walmart of seems going on activity a XXX bounce-back? to that. storage you There's been but there's I'm just U.S. add there've on to the questions very to X,XXX retail, the and this. stores We've going then easy like from there. a nearly It are lot globally, in How appreciate I retail thinking for follow-up,

guidance, as your XXXX. thinking I'm have but we how We through retail curious move component you're just about here the

Timothy Boswell

our expectations a of look delivery kind for that If the in storage, in We example, from in rebound at for haven't comps baked back to half significant vertical guidance. we despite first modest very we're XXXX. that looking

second would seasonal in increase assume year, that begin the to volumes dramatic a but bit then it assumed of in activity. the half not grow remodels or have delivery We more a

activity some the taken not aware you as store aware volumes. we've So begin of view data those that it cautious referenced. that remodel of to X also We're relates until XXXX. a point that We're others may

isn't trying and strong to balanced predicated outlook, a be we're on outlook that there. recovery the So about

Operator

question next of Faiza comes with Bank. the Alwy Our from Deutsche line

Faiza Alwy

I wanted being your follow around So to cautious. comments Tim, macro up on incrementally

just talk we retail incrementally on the some getting about things remodeling and out. and hearing modular the we So on doesn't side, got sort hand, because about seem I'm worse around pushed knew talking one optimism were like issues you of then it the how

So I'm a leading perspective like what's that's the -- incrementally where like just to cautious? you macro few from months curious in last be changed

Timothy Boswell

newest construction that right, data There mixed was there, You're footage, out nonresidential have year-over-year. right? down indicators are fourth The the we square is Faiza. XX% point which quarter

right? quarter. a QX that's So softest drop, year, for being the big down It XX% with was the

kind XXXX line Now of in levels. square above still are those levels and footage XXXX overall or

that And off a retail. impact volumes, environment, operating is that healthy was highs, XXXX storage excluding extraordinary still we're this of we So saw it's set that just in our QX a pretty all-time right? some coming and

would just some agree over have we later contribution with not assumptions was retail that worse rolling they're just XXXX. in I talked a QX point that than there about your are because in materially QX, bit demand the from

perspective, contrast what the year. the as modular to So headwind we seeing we're get seeing were a seeing start year-over-year will and in Again, And activations. we kind with QX, demand in into net segment. QX, that strong quoting that growth to the of that and orders activity of with we're ease specific then from we're storage year-over-year seeing good conversion

in at growth a the and going through units on to mid-single-digit inflect this to going lot sustain end compelling year, of business rent, the of seasonal course March our levels we're Now just clearer second and pretty starts that we're build and if as to have of it's we that into trajectory going we a become February, But normal April. half XXXX. get the into

Faiza Alwy

curious, like around I'm feels like the rental the just question has And don't the been the Understood. it in been asked rate, pricing course Okay. of then of modular growth little yet. has XQ. year, just through It's sort and a pricing right? less think how there In the and pricing modular should was Curious impact what be mix might a bit the up in if then first half, in we think about that were there XX%. 'XX. decelerating we

Timothy Boswell

Yes.

is, spread going roughly get current right? by the ground-level so about into that annual way As lease And a we're look I simple that we're delivered I So about got offices, average if mentioned by duration, XX%, if minute XXXX. and that to the offices, exclude spread if divide average very about we holding in can X, seeing just spot XX%. XX% is spot rates, that isolate now, you a think you've business. And the right a place ago, spread ground-level we spreads typically just X-year is rates rates that right? one seeing between spread our is growth rental that are And those healthy the

as a enter case assumption remains across the and our base that that modular tailwind products, we is very inclusive of XXXX, So powerful gloves.

Operator

of comes question next Steven Thompson from Research. the line Ramsey Our with

Steven Ramsey

trend and remodel to clarify storage start onto of Can to that how in happening industrial storage, runoff job construction, maybe behind if start this trending up activations is you gets is time. year. activations and retail the year? holiday And kind modular where this kind So is moving the the you on real orders pacing if modular period in up of to type modular sites, cross-selling exclude you of exclude

Timothy Boswell

get as Steve, on of better building are as relatively for outlook, I'll an greater the say of year. of opportunity. QX assumed assumptions think we half a get second we probably half that that flat cross-selling, into storage we've our definitely to focus it's place the activations to function of start more QX go. the that's mostly into I We've business the in the and then second core and just embedded specific comps That's being the although year. wouldn't I the purposes easier

of for activity earlier portfolio, well around taking the related other just and those a account customers. we with enterprise non-retail given to of a remodels assumptions our as within more it's sure, we're opportunity the saw there's store kind question what balanced making year QX. start as But function think non-res portfolio approach see that that sure the the in to we across I

Steven Ramsey

of midpoint you. the of then the high the for to foresee range? that you revenue? of the CapEx to And high Got to do having on how end million the the range, Okay. reach end year-over-year, Basically, much thinking invest to year CapEx higher about tied $XX is revenue

Timothy Boswell

higher million Look, $XX XX% CapEx that increase. about CapEx about is a XXXX, the million is net demand-driven. And if $XXX of just about to did in than clarify, midpoint we or

increase, to terms So would where this CapEx on long-term have very of requirement. our annual normalized is of significant we in although a centered much kind pointed

If well maintenance in $XXX does as refurbishments you we modular of as to growth investments the to spend CapEx storage assume growth around this climate-controlled introduced. business, million the that support there's imply platform investments support primarily

and fully require thing And the got fleet that Those across modular good CapEx you without this well, The there. and rate If we've that a side we be more I order new where to inventory support -- terms may in need don't got upside That the obviously dollars incremental may is investing right? can demand-driven expect get be you would our be in it in demand refurbishment, get area more new the absorbed storage to assets capture demand in network. as going to that the into business of the of midpoint. plenty excess would meaningful think I very is depending We increase end higher require comes business, a we could we'd growth only where the not of get those the platforms, incremental the will X from, into new or above purely XXXX. refurbishment bridge demand, the the If into feed run market. incremental surprised of to range from storage on capacity. CapEx. assets it came

side in So days XX I can on no allocation process think storage less CapEx normal based change a with our using my that reassess we every positioned zero-based and modular grow the how We right from refurbishment we're now and lot activity. on perspective. capital

Operator

Our comes next with from question Ng Philip Jefferies. of the line

Philip Ng

Encouraging from pickup that versus at that's driving diverged a of storage, orders the up else when we at see driving out your look activity? that markets Any and retail, net modular trends obviously divergence of in end have the Outside And that's activations stand modular anything of to year-over-year. even start perspective? some the year. bit

Bradley Soultz

it other geographically large volumes haven't by storage I'd say, his onshoring, non-resi prepared broad-based is that modular broad-based. as construction, obviously, winning Tim I is experienced And market, we just pretty seen reshoring, in cetera. accordingly. the Phil, turn mentioned the in remarks, infrastructure, end in and And that. by we so pretty mean, with decline we're yet encouraged quite et

Philip Ng

the these activity? seeing mega uptick infrastructure on been the projects of terms more has you're on some Brad, modular side that in And of

Bradley Soultz

broad-based. than pretty offices, digits. months X offices low last Maybe excluding And they're more over ground-level I and a activations including single been it's bit biased modular, up but are the that. that, to the up mean ground-level

So as Tim said, it's encouraging. early. It's

invest that that prepared we're it's to one So we'll demand watch and continues. if

Philip Ng

I your seeing heard on mean, if full you at Tim, modular. the you're guess I Okay. green guidance year, least correctly, I some for shoots

languishes kind like to midpoint the helpful. is context on the back if ability come on pick that back kind that's And what inflecting that price would how any your the year of retail don't know case up hit for here? you're be rent don't to than It got seems see your units half, but your EBITDA? of doesn't baking full perhaps seems base But in and you of levers still if what mix, more for in you storage, So reasonable. there I enough meaningful

Timothy Boswell

I with, headwind, that's many have we're to taken as we that levers in storage in I -- a of what recovery characterize year. got second question, relates levers, year significant your pricing a products in point, volumes. your a so the to relatively conservative would the minor of is levers. offset retail a we've view what if that half storage relative as We've no the the the given approach to To this business don't it concern levers, margin midpoint pretty guidance faced there's value-added for

range. order So can look, put to than to got as we're to has to I been to forth that an think our top helps performance believe deliver. you get to that win get lever to of significant way. expecting the we've range. more we some of M&A maybe of recovery range, this storage we margin end In I that to need the right, top the tuck-in end has more get think to midpoint. us stronger multiple upside history, is the trying ways you But get the numbers probably some go you upside the we're end in market Maybe of a

Operator

Thielman with of Brent the D.A. Our Davidson. next from line question comes

Brent Thielman

while with my could wait pre-McGrath. that you is then couple precludes the XXXX, continuing closure? for you expense ones Just me. the And I was hoping a set interest quick expectations second for question, we anything level Tim, just on just McGrath for obviously, from us buyback there

Timothy Boswell

Yes.

first your good a it's question, So one. on actually

baseline financing there cash on I of executed January. a state $XXX or especially in missing we're through include another divide And million the with current fees that, the do got be, where by not X that amortizing expense the and the the $XX swaps that scenarios QX. That of there we're know year, you we for. $XXX interest that rate, about $XX are in should are that inclusive we about about the P&L. add million as debt run at our So the But analysts quarterly balance at GAAP to are QX into numbers, right? materials, on noncash million cash run current does so look right deferred least the as out heading the as take rate. some of another we What you run progress around through million we the adjust at different think for we'll rate, you year, interest, As for that's obviously, there you

the then when information did buyback transaction, of So to in the possibility the been we hold QX We on pause right? McGrath has buyback the nonpublic material relating the of point got middle to as we and having of a progresses. nonpublic market, release we can as information, the And not be time. earnings here material, repurchase that will as obviously that as since we transaction change in the but long have

a So not whether as repurchase be period-by-period a it's in from should the of to standpoint. we or kind determination market

Brent Thielman

other, if one I Okay. Understood. I of could. thought

talked you here. end especially Just about markets, non-res lot a the retail

I you think in the earned other heard of more I've interested over I rates cetera. months? next et irregardless obviously forces, we you're guess capture can But as XX volume, I'm of you doing on higher sort share internally consolidating initiatives branches, that sales things the mention can what of here. needle afford markets of anything think the the wanting these some move without you've lease to sacrifice

Timothy Boswell

for change consolidation we is that sales right? to next is geographic solutions we tool is single responsible sales by opportunity supports the the leader of CRM, accountable rep did all meaningful. structural guesswork there we cross-selling. general team which I and what launched consolidate very a only So for realignment our We've that's single got customers that opportunity Yes, our at our serve, every should prioritization few, It working. and out our responsible mean is be the quite now some Not the of algorithm-enabled to a all takes of of a market best CRM. presenting a enabled field that every of an manager reps, that customers, the are a our opportunity Brent. for

whether product based recommendations are role, to maybe tailored territory or category. those their they're And our responsible on responsible a a reps sales for for they're certain

enterprise tools, which here pilot And we're sophisticated QX of much supporting that. going We're the supporting are business development. and opportunities that to in we've vertical more in got marketing with into stages starting QX. digital We accounts early and in

to So there's list potential relatively of a fairly early long the irrespective also they're volumes things, drive markets, that in have of but my opinion, stage.

the of the impactful both assumptions those quite of our and we year, haven't logical in benefit all assumed first but any half potentially and collectively. they're So for individually

really we see I'm here changes getting We structure XXXX. that little So made a the bit those XXXX. in the what about of and in through comes of see impatient. our excited course investments. investments those that excited to And want we're frankly, we're That's those out production to

Operator

Our question Angel comes Morgan Castillo Stanley. with from next

Angel Castillo Malpica

rates. And to the quick of guess, slides, had rate I sure, as correctly. quarter, looking wanted delivered -- just a one, $XXX. inflection down I recall sounds guess, sounded like from your $XXX make like third modular a VAPS understood kind guess, the the from I I Just was It seen I strong in at just it for you average I

of the about kind trying the expected, talked -- bridge of inflect delivery quarter fourth that's LTM kind to understand And the slides just as that to or part that really we think it's the guess down comments won't of and that in second So decline. I rate X%, an about then or middle until the XXXX.

just So that bridge to number earlier. understand to about trying you $XXX that the and talked

Timothy Boswell

in course in the ramping January, up so $XXX Right. year. frame. which under we quarter's that achieved were of delivered kind The prior historically, far, think QX going of or And I was with the are levels, where of highs in inflect our reported back as more rate so the the of XXXX, half relative like that we've significantly the $XXX kind assuming to second methodology we that LTM and of that so those would sustain February historical through to in is time month performing the line rate

more last you just So need those of kind offset periods think QX post penetration that CRM it's performance I rate of some under back the year. today's weaker flow of of into the cutover LTM of in a to reflection and

Angel Castillo Malpica

it. Got

just current the CRM impacting? the $XXX, VAPS for of So essentially was rate still kind guess flow-through that I the of of

Timothy Boswell

was the reflection And $XXX penetration increasing Yes, that's year-over-year, probably of be the so in right? that a the going to up that's biggest primarily low driver. And number. X%

Angel Castillo Malpica

just maybe quick it. And one. a Got housekeeping

for give terms sales also you in us and bit in color more could your and unit just sequential new for little that step-up Just XXXX? the a the of rental quarter, expectations fourth on

Timothy Boswell

Yes. It's drivers, probably two primarily.

fleet opportunistic fleet with utilization we'll a Given else equal, be where bit the all of levels are at, rental sales. more some

primarily want to of last market that quarter we purposes line it the year, say the the West business I And into on is new flowing niche acquisitions the One contribution serving has of manufacturing time some executed, sales the of Coast. August education frame revenue the QX. was of capabilities, full for that

some of of that QX they Sales think I kind reasonable So lumpier that going bit mix mix I for in when year. could new for the a inherently little the of used overall there's in operating sales a across fluctuate course are XXXX. quarter XXXX. indicator we're so fall, growth how into terms probably is said of a think purposes over I of and prepared given Like remarks, my opportunity

Operator

back today's Nick. end the over reached now to now turn have the will call. I of We call

Nick Girardi

interest your Mobile Mini. for in WillScot all you Thank Amy. Thanks,

If please after you additional call, have today's questions contact me.

Operator

today's and Thank ladies concludes This conference. gentlemen. you,

You may disconnect. now

WillScot (WSC) 20 Feb 242023 Q4 Earnings call transcript